Investing In Stock Markets
Investing in the Stock Market/Share Market or Equity Market is one of the best investment ideas in the market. With high risk and higher returns, Stock Market seems like a perfect option. But, Is it that good or these are just exaggerations? Through this guide on ‘Investing In Stock Market’, we will list you with everything one needs to know before stepping into the stock world. We will quench your thirst for answers that you are earnestly looking for, about everything stocks.
What are the requirements?
Before you start with your investments, there are a few formalities that need to be taken care of. The stock or share market of every country runs based on a few rules and regulations, and so does the Securities and Exchange Board of India (Sebi). Listed below are the formalities and documents you will need while opening a Demat account.
- Aadhar card and PAN card: These two are mandatory if you are planning an investment with Sebi. They will ask for these for the Know Your Customer or as we call it the KYC procedure.
- Six-months Bank Statement & a Cancelled Cheque: These are the new compulsion made by the government, to open a dematerialized or Demat account.
Once you are ready with these documents you can easily open your account and you are all set. After the account is ready you will need a broker. This part is where people usually hesitate. Most of you will ask the Broker? Is it really necessary?
Well, if we truly speak about the obligation, there is no such rule. You can simply do it on your own. Two ways are using which you will not need a broker to buy stocks are listed below:
- Direct Stock Purchase Plan: These plans were forged generations ago, to make it easier for people with less finance to buy stocks directly from the company. DSPP, allows you to buy stocks or shares from a company without involving brokers, provided that they can take a reasonable amount from your account for six months, or better if you can pay the amount at once.
- Dividend Reinvestment Program: Under the DRIP or Dividend Reinvestment Program, you are allowed to buy shares without a broker. Through this, the amount of money that you make is plowed back into buying more units. That is, you will measure your growth in the form of units rather than cash.
Albeit you don’t need a broker, getting one is advisable, especially for beginners. These people are professionals and are good at their jobs. A good broker knows the entry and exit points like the back of their hand. Their help may reduce the risk factor by a mile.
Purchasing and Selling
So as to purchase or sell shares, one needs to advise the dealer the amount to be purchased or sold alongside the cost at which you wish to do the exchange. While putting resources into the offer market, these are the approaches to contribute:
1. Comprehend your venture prerequisite and take choices likewise.
2. Choose your objective and plan the speculation procedure in a like manner. Discover the stocks that are probably going to line up with your speculation destinations.
3. Enter the market at the correct time. Attempt and purchase the offer at its most reduced expense particularly when the market is powerless and sell when it rallies. This would yield more significant yields.
4. While exchanging you ought to convey the necessities to your representative. Guarantee that the dealer does as needs be and cross-check to stay away from any blunders.
5. Screen your portfolio routinely. Rather than keeping all investments tied up in one place, have the most ideal blend of stocks. It assists with maintaining a strategic distance from pointless danger.
These were some tips on how you can start with your investment in the Stock Market. Remember that planning is the key and rest assured you will surely succeed in making good money by taking risks. So this is my short view on investing in stock market.